MW : Oil futures gain 1% as dollar falls, U.S. equities rise
Crude for September delivery gained 85 cents, or 1%, to $67.57 a barrel in electronic trading on Globex.
"Slight dollar weakness and possibly oversold conditions seem to be putting a floor under prices for now," said Kevin Kerr, president of Kerr Trading International.
Oil prices have declined in the previous two sessions and ended last week with losses.
In the currency markets, the dollar declined against the euro and the British pound after data showed that U.S. housing starts were flat in July, while producer prices fell in the same month.
Weakness in the greenback typically boosts dollar-denominated commodities.
The dollar index (DXY 79.24, -0.05, -0.07%) , which tracks the greenback against a trade-weighted basket of six major currencies, fell to 79.100 from 79.288 late Monday.
On Wall Street, the S&P 500 stock index (SPX 984.16, +4.43, +0.45%) rose 0.6% to 985.26 points.
"Given market participants' wariness regarding the prospects for economic recovery at the moment, crude prices are vulnerable to a further sell-off towards the $63.87 correction level, especially if we see poor U.S. housing data and further stock builds later today," wrote Nimit Khamar, analyst at Sucden Financial Research, in a note to clients.
USO 35.90, +0.38, +1.07%
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The Commerce Department estimated Tuesday that U.S. housing starts fell 1% in July to a seasonally adjusted annual rate of 581,000 from an upwardly revised 587,000 rate in June.
Separately, data showed that producer prices fell 0.9% in July, after seasonal adjustments, as prices for energy and food dropped.
Supply data ahead
The American Petroleum Institute will release data on petroleum inventories Tuesday afternoon, while the Energy Information Administration will report its more closely watched data on Wednesday morning.
Analysts polled by Platts expect the data to show that crude stocks rose by 1.1 million barrels during the week ended Aug. 14. They also project a decline of 1.7 million barrels in gasoline stocks as well as a build of 800,000 barrels in distillate stocks.
Refinery utilization rates are expected to increase by 0.25 percentage point to 83.75%.
Also on Globex, September reformulated gasoline fell 0.2% to $1.9468 a gallon and September heating oil gained 0.4% to $1.8326 a gallon.
September natural-gas futures were little changed at $3.166 per million British thermal units.
The United Stats Natural Gas Fund LP (UNG 12.08, -0.04, -0.34%) fell 0.3%, while the United States Oil Fund LP (USO 35.90, +0.38, +1.07%) gained 1.1%.
